The Internal Revenue Services (IRS) issued Notice 2014-67 on Oct. 24, 2014, to “amplify” Revenue Procedure 97-13 by (i) creating a new five-year safe harbor for management contracts, and (ii) expanding the permitted types of productivity awards allowed.
Rev. Proc. 97-13 describes certain “safe harbor” arrangements that tax-exempt healthcare facilities financed with tax-free bonds can rely on to ensure any “management, service or incentive payment contract” between the facility and a service provider does not result in private business use. Many physician service agreements fall within this category.
Continue Reading IRS notice provides more flexibility to Rev. Proc. 97-13